libpcap stands for packet capture library. It provides a portable interface on top of packet sniffers such as BPF and others. It allows you to write your program on Linux and chances are that it'll work on BSD as well. The same people who wrote tcpdump wrote libpcap and the one relies on the other to build.
Spooks and law enforcement are often interested in libpcap, however it can do a lot more than keeping an eye on your data as in sniffing